—Results Briefing, May 12, 2023 (Extract)—
For the fiscal year ended March 31, 2023, our net sales came to 483.0 billion yen, and operating profit amounted to 66.0 billion yen, while net sales and profits at every level again reached record highs.
We announced consolidated results forecasts for the fiscal year ending March 31, 2024 of 531.0 billion yen in net sales, 75.5 billion yen in operating profit, 58.5 billion yen in profit attributable to owners of parent, and 374.83 yen in basic earnings per share.
Yakult’s dividend policy places top priority on aiming to continuously increase payouts. In line with this policy, we raised the dividend per share by 9 yen in May 2022, followed by another 9 yen per share in November 2022, resulting in an annual dividend of 90 yen. For the fiscal year ending March 31, 2024 as well, we announced a further dividend increase of 20 yen per share, for an annual dividend forecast of 110 yen, considering progress in terms of corporate performance.
Initiatives in Each Business
Domestic Food and Beverage Business
Yakult 1000 and Ｙ1000 have continued to perform well, driving increased brand value for Yakult , which has enabled us to sell more bottles of dairy products as a whole.
However, with parts of our supply system still experiencing stock shortages, we are considering how we can expand supply capacity, focusing not only on Yakult 1000 and Ｙ1000, but on the balance among all our dairy products. We plan to start operations at Fuji Oyama Yakult Plant in March 2024. This is our first attempt to set up a production subsidiary on the grounds of a partner company; it is one of various methods we will explore as we seek to improve our supply system.
Home Delivery Channel
For the fiscal year ending March 31, 2024, we have set a target of selling 2.5 million bottles of Yakult 1000 per day. We expanded production capacity in late March 2023, but the volume supplied cannot yet be described as sufficient. We are extremely sorry to have caused inconvenience to a large number of customers who are waiting for supplies of Yakult 1000 to become available. We will make progress in expanding our supply system as soon as possible.
We will also make it a priority to invest effort in expanding the Yakult Ladies organization, which is the linchpin of Yakult’s home delivery operations. Over the last few years, the number of Yakult Ladies has remained largely unchanged. The number who quit work is declining thanks to progress in enhancing employment conditions, improving work environments, and providing better training. From now on, therefore, we intend to provide more job opportunities by offering worker-oriented terms of employment and ways of working. Moreover, we will seek to encourage long-term employment by increasing the core group of Yakult Ladies who generate substantial sales and earn higher incomes.
The fiscal year ending March 31, 2024 marks the 60th anniversary of the Yakult Ladies organization. During this year, we will strengthen the foundation of our home delivery system and invest effort in creating an organization that can communicate Yakult’s appeal to even more people.
Retail Store Channel
For the fiscal year ending March 31, 2024, we have set a target of selling 950 thousand bottles of Ｙ1000 per day. We expanded production capacity in April 2023, but as is the case for Yakult 1000 , the volume supplied remains insufficient and stock shortages persist in some stores.
However, the launch of Ｙ1000 did enliven sales spaces and increase customer numbers. Meanwhile, as sales of New Yakult products and Yakult Five are also growing steadily in terms of the number of bottles sold, we will continue efforts to transition customers from trial purchasing to increased repeat purchasing, primarily by deploying strategies attuned to market needs.
Individual overseas companies are working to resume business activities and bolster their organizations in response to the easing of Covid-related restrictions. In both 2022 and 2023, we raised prices according to each country’s circumstances, taking economic trends and other factors into account. Meanwhile, we are actively launching high value-added products incorporating more lactic acid bacteria, in addition to regular Yakult products and Yakult Light products.
I regard the current fiscal year—the first genuinely “post-Covid” fiscal year—as a crucial period for resuming our usual activities and returning to a growth trajectory.
During the fiscal year ended March 31, 2023, China maintained its strict zero-Covid policy, and our operations were seriously impacted as a result. Since the start of the current fiscal year, economic activities have resumed in stages, but I believe the positive effects of reopening will not emerge until later. For three years the Covid pandemic prevented us from operating as we wanted to, but China now provides an environment in which we can conduct sales activities free from restrictions again.
In the short term, we will pursue the in-person approaches to prospective customers that are our forte, such as in-store sampling campaigns, dispatch of guest lecturers, health-related classes, and plant tours. In conjunction with this, we will further increase opportunities to provide information via social media by, for example, posting Key Opinion Consumers’ product reviews or using live commerce. In the medium- to long term, we will also focus on home delivery, in which we have a competitive edge, and press ahead with initiatives such as expanding the Yakult Ladies organization and cultivating existing markets. Meanwhile, as the areas that spearheaded sales in China have produced a number of success stories, we will disseminate the know-how thus acquired across other areas.
Since the second quarter of the fiscal year ended March 31, 2023, the number of bottles sold has been lower year-on-year. An external factor contributing to this decline is the slowdown in consumption due to inflation, while an internal factor is reduced sales capabilities resulting from our inability to conduct in-person training during the Covid pandemic. However, we resumed in-person training for Yakult Ladies and sales personnel around the end of 2022 and our “selling power” is now steadily returning; I believe this will eventually lead to more bottles being sold. Our strength as an organization, built up over many years, remains robust, and both Yakult Ladies and the stores we supply to are steadily increasing in number, so we will continue expanding our sales channels.
The number of bottles sold has been higher year-on-year for six consecutive quarters, so I believe we are now in a recovery phase. As sales volumes and the number of Yakult Ladies have returned to their pre-Covid levels, and the number of stores we supply is also increasing steadily, I want us to build up the type of growth trajectory we achieved previously and increase sales volumes further.
In the fiscal year ended March 31, 2023, the number of bottles sold by Yakult U.S.A. Inc. again achieved double-digit growth. In the six states centered on California where the company first conducted sales activities, continuous growth in the number of bottles sold per store attests to successful cultivation of the market. The number of stores supplied is also increasing steadily, as the business is developed through a combination of cultivation and expansion. The company resumed in-person sampling campaigns around the middle of the fiscal year under review, and can be expected to grow continuously in future.
Japan’s National Health Insurance drug prices were revised again in April 2023, resulting in a reduction of around 10% in the prices for most of Yakult’s pharmaceutical products. As developments including intensifying competition in the oncology field increase the severity of our business environment from one year to the next, we are considering our future direction.
Alongside the measures outlined above, we will continue to pursue ESG-aware management. As a pioneer in the health industry, the Yakult Group regards the strength of human resources and the spirit of harmony it has emphasized since its founding as its greatest driving forces. We endeavor to create working environments in which our employees, Yakult Ladies, and other human resources can work enjoyably and in good health for a long time.
To maintain and improve employee health, we set up a dedicated department to promote Health-focused Management, and we have been certified as a White 500 Health and Productivity Management Organization for six consecutive years now.
As a company that delivers good health to its customers, we will continue pursuing Health-focused Management and striving to increase our corporate value.
I look forward to and would appreciate your continued guidance and support.
President and Representative Director
Yakult Honsha Co., Ltd.